Wine+Musings

Source: fastcodesign.com

February 2013 Trend Briefing: VIRGIN CONSUMERS

Consumers are now enjoying endless first times, on a daily basis. 

With so many Sonoma County and Napa County wineries, this truly hits home. 

While VIRGIN CONSUMERS might be unfamiliar with a specific new product, brand or sector, they aren’t clueless or naïve. Au contraire: years of immersion in consumer societies means that even VIRGIN CONSUMERS are well versed in consumerism at large*.

That means previous Trend Briefings relating to changing consumer expectations and attitudes still apply: VIRGINS know good service – or even better, SERVILE BRANDS – when they see them. And it should go without saying that they expect FULL FRONTAL transparency – on ethics, business process, even financials – from brands, and will embrace a GENERATION G(ENEROSITY) approach to giving back to society.

Good read with many ideas that can be applied to the wine industry. 

SVB State of the Wine Industry 2013

Great video from Google. Be sure to read the entire post for other humorous examples and action items. 

For better or worse, customers are accustomed to the amazon shopping experience. Even if you are a small boutique winery, your e-comm experience is directly compared to the big guys. A priority for small wineries is to make the purchase funnel and check-out experience as simple and painless as possible. 

Wine is already heavy/expensive to ship, sensitive to heat, limited by shipping regulations, and there’s no immediate gratification. Don’t add to the burden of buying online. Gilt Taste, Lot 18, Invino are making it easy to order online, and while these companies are filled with their own pros/cons (which deserves a separate conversation), they are paving the way for better wine e-commerce in 2013. 

Another great article by SVB on Wine describing the use of social media, the Millennial wine consumer, and the need for CRM in the wine industry. It’s great to finally see some accurate descriptions of the millennial wine consumer: 

As far as the Millennials are concerned as you may have read from some of my other writings, they aren’t beating a path to your cellar door. Why? Because while they are the future consumer, today they can’t afford your wine if your shelf price is over $20. You could have the coolest, edgiest and most current tasting room experience in the world today; even play Techno in the background but the best you will hope to do is attract a young wine tasting crowd. You aren’t attracting wine buyers in Millennials.

This pretty much sums up the current state of Millennials the industry: 

Millennials are wine drinkers but not really fine wine consumers.

They will be wine consumers, but not for another 5-10 years. So what should we as wine marketers do now? Try to better understand our customer experiences. Most small wineries who rely on direct to consumer sales are unaware of their customer habits, unable to capture that data, or unwilling to invest in the required technology to gain insight. 

This is no longer booze and guessing, successful marketing requires accurate data. While this applies to all generations, it’s incredibly important for Millennials, who are always digitally connected, starting with more information, and presented with lots of options.

My take is that this Millennial demographic is the “Experience Driven Generation.” Yes they like wine, but they also like Bourbon, craft beer, and mixologists. They like new experiences and they are willing to pay for a unique, personal, and memorable event. 

While it currently might not always be a wine experience, knowing what specifically excites your customer (red vs white wines, events, food pairings, etc.) can go a long way in marketing one-to-one. Developing this strategy now can pay dividends down the road. In 5-10 years they will be the wine consumers and the marketing landscape will have changed. 

As many other wineries, we’re currently struggling with getting our POS, wine club, e-commerce, email, CRM, and analytics to talk to each other. There’s a lot of silos and a lot of manual transfer of data. Our 2013 New Year’s resolution is to get these platforms integrated so we can better understand our customers. I would love to chat more about these data silos with the community. 

-JM

Want To Reach Mobile Users? Try Their Inbox

As the world shifts to mobile, this is a great article describing an easy way to connect with mobile users. 

Sales calls on a smartphone are unheard of. Texting is reserved for friends and family. Apps only reach select audiences. Social media is fine for listening — but not for selling.

But if you want to really want to have a relationship with mobile device users — soon to be another name for the majority of Americans —  the channel that works best is email.

This works great for wineries, where staff are able to encourage patrons to opt-in to their email list in the tasting room and are then able to continue the conversation after the visit. We’ve seen success with magnum bottle raffles, or discounts on future releases as ways to entice users to volunteer their email address. With a quality opt-in list you’ll be able to reach an already familiar audience with much better engagement and response. Many check email with mobile, and with links that are mobile friendly, its easy to reach your target consumer. 

Why try to buy your way in when consumers aren’t even paying attention? Here are some stats from the infographic courtesy of Mashable. Click through for the full infographic, there are some interesting talking points. 

• 44% of direct mail is never opened. That’s a waste of time, postage and paper.
• 86% of people skip through television commercials.
• 84% of 25 to 34 year olds have clicked out of a website because of an “irrelevant or intrusive ad.”
• The cost per lead in outbound marketing is more than for inbound marketing.

Google recently released a sub-site describing online consumer behavior, dedicated to better understanding the “Zero Moment of Truth.” As the mini-book describes, this zero moment is when consumers are actively seeking out online ratings, social media-based peer reviews, videos, and in-depth product details as they move down the path to purchase.

This “zero moment” is a big deal for wine brands. In the wine industry where there is a seemingly endless number of wineries with an endless number of current releases, the “zero moment” is becoming critical for a brand’s desire to be added to the consideration set. Wine brands must address, and even focus on, what people are saying about their product and how it is being presented to the world. 

It’s worth noting (and google does a great job of this) that word-of-mouth and peer reviews have been around forever: 

The tremendous explosion of ratings and reviews online has changed how people get information. But the change is still based on that oldest of human traits: word of mouth.

“Word of mouth is the medium we’ve been using since the tribal days to talk about essential knowledge,” says Brett Hurt of Bazaarvoice. “Where’s the hunting good? Where’s the fishing good? How do you not get eaten by the saber-toothed tiger?”

Except today’s tribal members aren’t talking about tigers — they’re talking about your product, every day, on a dozen sites you’ve heard of and a thousand sites you haven’t.

Word-of-mouth is extremely powerful. A positive peer review is far more effective than anything the brand can promote. Having positive ambassadors that can speak on behalf of the brand makes our job very effective. But it’s like saying “let’s make our content go viral.” (please don’t say that…) For many wine marketers, the primary focus should be on providing a memorable experience. Enjoyable products and experiences boost social sharing; people are usually inclined to share exciting events. The second focus is making it very easy for our fans and supporters to share and find information, and this is where we need to get and stay involved. 

With technology, it’s easier than ever before to share reviews, post comments, write tasting notes. Just take a look at yelp.com, cellartracker, SwirlIt, even flash-sale sites with tasting panels Plonk Wine Merchants, Lot18 and Gilt Taste. All of these sites are designed to make it “easier” for the consumer to find a wine they will enjoy. Encouraging feedback, integrating reviews on product pages, and providing easy access to current reviews helps the consumer find this “zero moment.”

If you can support the loyalists who actively share, it’s a win-win: they are just as excited to share with their peers as you are in presenting an exciting brand. As Google suggests, get involved: 

The conversation is already going on. Right now, at this moment, people are talking about your product online. You can’t start it or stop it. You can choose not to engage, but that’s really like sticking your head in the sand while a competitor jogs by to grab your customers. Better to welcome the conversation and be part of it yourself. As Brett Hurt puts it, “Word of mouth online has got to become part of the central nervous system for every company.

How to get involved is another rant. We’ll chat more about the WTF online presence (Web, Twitter, Facebook) in future posts. 

JM.

My first experience with a Cabernet future tasting was a few years ago, and it’s a perfect story to support my previous post and illustrate the need for a quality customer experience. Disclaimer: I think Cabernet future tastings are highly comical. I personally (here comes the rant) can’t taste a juvenile cab that still has three+ years in the barrel and know unequivocally that I will enjoy the final product. That’s crazy. I always hear the same reasoning: its an investment in the future, the winery always produces quality cabs, etc. etc., but for $600/case I think this is absurd. That being said, the event is brilliant for a variety of reasons:

• The event created a memorable experience. There is an air of luxury inside a chilled cave cellar, barrel tasting cab futures. They are selling luxury, selling a great experience, one that was memorable, and most importantly, a whole lot of fun. There a dozens after dozens of wineries along Silverado Trail, and because of this single great experience, I make an effort to return. 
• I always have a similar experience every time I return, usually resulting in purchase. While the ROI on events can be difficult to measure (another post for sure), it’s usually positive. Many events have a latent impact, and measuring can prove difficult, but the value is there.
• This event is exciting to share. I’m doing it right now. Word of mouth is a medium that has been around forever, and is far more effective than any brand promotion. Your loyal customers and your club members are your brand ambassadors and their influence can be huge. Keep providing them exciting experiences to share and they’ll do the heavy lifting. 

This post developed out of dinner conversation at Terzo in San Francisco with a glass of 2009 Cotes du Rhone, L’Estagnol, Rhone, France. Perfect with their menu. Also a fan of the 2009 Sangiovese “Terrazze”, Morelli, Marche, Italy, also by the glass. Check them out. 

-JM

There has been a lot of news surrounding the millennial consumer entering the wine industry and being a millennial, this seems to be a great place to start this blog: wine demographics and the importance of brand experience.

Despite the recent press, and brands moving marketing dollars to this demographic, I personally believe the millennial customer is not going to move the needle for luxury wine sales ($20+ per bottle) in the near term. I feel this comment is obvious when this group has the highest unemployment rate, are not established in their careers, lacking discretionary income, and have the smallest amount of wealth of all the demographic tiers.

This is not to say you should forget about the millennial consumer, it is just worth pointing out that it’s not age that you should segment against. With the current state of the economy, it is discretionary income that matters, and it trumps age every time: 

Understanding who is buying your wine and knowing why they buy is far more important than trying to categorize age groups and looking for generalizations so you can sell a luxury good. - SVB, Wine Industry Report 2011-2012 (PDF). 

For luxury wine sales, it’s the experience that matters. It’s our job as wine marketers to sell an experience (whatever that may be) to attract consumers. The Wine Industry Report continues: 

Keep in mind that you aren’t just selling wine, you are selling an experience: what the wine does for your consumer. Affluents more than any class of consumers can have any “thing” they want. It’s an experience they desire, and those wineries that focus on the brand and experience will have more success than those who don’t.

There are a lot of caveats (we are not talking about Yellowtail or Barefoot), but for luxury wine, I support that age is less important than spending ability. As the economy recovers and this very large millennial generation establishes themselves, they will have a large impact. For one, they are more interested in wine than any other generation, and will be craving a unique experience they can share with friends. 

Our goal as marketers is the same as all other industries: the right message, at the right time, to the right consumer. Identifying a brands target consumer and how they react to marketing messages is paramount to effectively communicating this experience. Fine wine consumers want to be influenced by brands, and they will happily pay for that unique experience. 

Let’s focus on the experience. 

That’s a good place to stop for now. Most of my thoughts will be driven by personal experiences as we continue to develop this exciting industry. Most often, my posts will be fueled by wine, and I’ll be sure to post what I’m drinking at the time.

I know alcohol and blogging is often frowned upon, but wine is the social lubricant of all time. Conversation is encouraged. 

-JM